More oil likely in Cuba

MELBOURNE, Oct. 27 (UPI) — MEO Australia, the only Australian company
with a footprint in Cuba, said ongoing work is expected to translate to
more potential oil reserves in the country.

In an update on operations through the end of September, the company,
one of the few Western companies working in Cuba, said it identified oil
plays in so-called Block 9 that combine for an estimated 8.2 billion
barrels of oil in place. The company’s best estimate is that it could
recover about 395 million of those barrels.

“An assessment of the other two shallower oil play types is ongoing and
is expected to add significantly to the potential oil-in-place and
resource base of Block 9,” the company said in its assessment.

In mid-September, the company said it was selling off parts of its
holdings in a potentially lucrative basin off the coast of Australia to
help fund opportunities in Cuba, its highest priority asset.

According to MEO, Cuba produces about 80,000 barrels of oil per day.
Canada’s Sherritt International, the only foreign company producing in
Cuba, estimates operating costs of around $9 per barrel.

The Cuban government in 2014 enacted legislation offering corporate tax
credits to encourage foreign investments. The U.S. government the same
year started easing a 54-year trade embargo on Cuba and later reopened
its embassy in Havana.

This month, U.S. President Barack Obama issued an executive directive
that could open Cuba to a role in institutions like the International
Monetary Fund and the World Bank, which Washington said could provide an
advantage to the Cuban economy. On Wednesday, the United States for the
first time abstained from voting on a U.N. resolution critical of a
Cuban embargo.

MEO said easing U.S. restrictions on Cuba were “clearly a positive step”
for the company.

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